Connecticut Law requires that all sales and leases of new passenger cars and motorcycles in Connecticut include a dealer surcharge. The $3.00 surcharge is to be collected by the new car dealer from the car buyer. The collected surcharges are sent to the Department of Consumer Protection where they are deposited into a restricted-use appropriation account, and used to fund the activities of the State’s Lemon Law Arbitration Program.

This program provides an independent arbitration mechanism for settling disputes between consumers and automobile manufacturers regarding defective new cars and motorcycles. 

Sales or leases of new passenger motor vehicles or motorcycles to the State of Connecticut, the federal government, and municipal governments are exempt from the New Automobile Warranties Account surcharge. All other sales and leases of new passenger motor vehicles and motorcycles are subject to the surcharge, including those sales or leases that are exempt from sales and use tax.